Taxation is a thorny issue

tax

Seemingly no one wants to pay tax yet the world could not operate if we did not. According to Duncan Watts in his book Six Degrees,  ‘In not one country in the world is the payment of taxes a voluntary exercise.’ The question should be why? You should try running a country without it.

Now we are in an election period, debate is raging about how much we should be expected to pay with each side claiming and counter claiming its own fiscal probity. As usual the issue centres around should the super-rich (those richer than you and me) be made to pay more or be allowed to keep their money to do with what they like.

If only it was that simple.

Lord Sugar has chipped into the debate ‘I pay all my taxes at the rate of 45% and am happy to do so . If tax rates rise to 70% like they did in France a few years back , then enterprising  people will have no incentive to work or indeed employ others.’ 

Of course he is only referring to income tax on his pay above £150,000 taxable income and fails to mention that the GDP of France is bigger than that of the UK which goes someway to undermining the argument.

Meanwhile Laura Pidcock, MP for North West Durham tweeted ‘I find the astonishment being expressed in defence of billionaires here extraordinary, really. I don’t think it’s outrageous or even radical to aspire to live in a society without excessive wealth, any more than it is to aspire to a society without excessive poverty. We often hear stats like the top 1% of earners pay 27% of income tax. But, including all taxes, like national insurance, VAT etc you get a very different picture. Incl. all taxes, the lowest 10% of earners pay 47% of their income in tax, as against 33-35% for the top 10%.’

The issue is not that we have rich people and poor people but rather we are encouraged to live in a system which permits excesses at both ends of the scale. We are also encouraged to believe that poor people somehow deserve their fate and rich people have earned what they have, both of which statements do not hold water.

In truth there is enough money in this country for everybody to be reasonably well off and that there comes a point where any more money won’t make a difference to a person’s material well being. What that level is I don’t know. Henry Ford recognised that only by paying his workers well could he expect to sell them cars. 

I have no issue with people being rich other than if it comes at the expense of the poor. We need a fairer society, one without food banks, in-work poverty, rough sleeping and free school meals.

We used to think of slavery as acceptable but now we don’t. Today we should think of poverty in the same way. It is unacceptable.

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